XN000022-1997-04-09 — Page 35

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Confirmors in property transactions

Following is a question by the Hon Lee Wing-tat and a written reply by the Secretary for Housing, Mr Dominic Wong, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council:

(a)

(b)

Answer:

Mr President,

of the respective numbers of transactions in uncompleted and completed flats involving confirmors in each of the months since January 1994, their respective proportions to the total number of property transactions in each of the months in question, and the number of confirmors involved in each transaction; and

whether it has conducted any study to ascertain if the recent phenomenon of a large number of property transactions involving confirmors is a reflection of a rising trend of speculation in the property market?

Information on transactions involving confirmors, where available, is given in

the Annex.

Confirmor is a term commonly used to refer to people who buy a property and then resell it before the actual assignment process for the property is completed. Transactions involving confirmors have usually existed, whether in an up-market or down-market. As there are great risks involved, home buyers should avoid buying from confirmors.

We have examined the recent increase in confirmor transactions. The rise in number gives a broad indication of speculative activity in the residential property market, and may contribute to price increases to some extent. However, upward movement in prices cannot be sustained without regard to affordability, or without a genuine increase in demand from end-users. This can be seen from the increasing number of cases recently where confirmors have reduced prices in order to resell their properties.

The ultimate solution to tackle speculation and soften price escalation lies in increasing land and housing supply, for which the Government has already announced the plans.